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Case 2:08-cv-10156-VAR-DAS Document 7 Filed 01/14/2008 Page 1 of 16
Plaintiffs,
Defendants.
_________________________________/
I. INTRODUCTION
Before the Court is Plaintiffs’ Motion for a Temporary Restraining Order and
II. BACKGROUND
This matter involves a dispute over channels for public, educational and
governmental use ("PEG channels"). Under the Cable Television Consumer Protection
and Competition Act of 1992 (“Cable Act”), 47 U.S.C. § 521 et seq., local government
franchising authorities may require cable operators to designate channel capacity for
PEG channels.
Defendants Comcast of Michigan III, Inc., and Comcast of the South, Inc.
("Defendants") entered into cable franchise agreements (“Agreements") with the Charter
Dockets.Justia.com
Case 2:08-cv-10156-VAR-DAS Document 7 Filed 01/14/2008 Page 2 of 16
Dearborn. The Municipal Plaintiffs have two distinct sets of PEG channels. Dearborn’s
franchise agreement requires that Defendants provide six PEG channels, while
Meridian’s franchise agreement requires eight. These channels are for public
governmental use, for use by the public school districts and community colleges, and for
basic cable service from Defendants. Her package currently provides access to PEG
channels, in analog format, and does not require the use of a digital converter box.
But, on January 15, 2008, Defendants plan to convert the analog PEG channels
into digital format. With this change, PEGs will no longer be accessible through
Defendants’ limited basic service package without a converter box. Current limited
basic service tier subscribers, including Gillette, will only be able to view PEG channels
if they lease or purchase a converter box, own a more advanced television that is
equipped with a QAM tuner (a device that Defendants maintain allows viewing of the
reliability for programmers, and will make Defendants more competitive. There is also
no disagreement that digitizing channels frees up broadband width on the cable system,
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Importantly, converter boxes will not be necessary after January 15, 2008 for
customers to continue viewing broadcast channels on the current limited basic service
tier; they will remain analog. Defendants say they may create a basic service tier in
which some channels are provided in digital and others in analog format. Plaintiffs don’t
disagree, but say the law requires that Defendants provide PEG channels on the same
To ease the pending transition, Defendants offer to provide one free digital
converter box per household for a year. But, Defendants acknowledge a converter box
is needed for every television on which a customer wishes to view PEG channels.
Municipal Plaintiffs say the change will affect more than 50,000 households within their
territory. Defendants say only 50% of its statewide customers subscribe to the limited
basic tier of service, and estimate that the change will only affect 15,000 households.
Plaintiffs filed their motions on January 11, 2008, and claim Defendants’
scheduled January 15, 2008 transition violates federal law and their Agreements for the
following reasons:
1. Defendants’ actions will no longer keep PEGs on par with the lowest
commercial service (i.e., broadcast channels) available, because people
who want to use PEGs must invest in additional equipment.
2. Low income and senior citizens -- those who can least afford it -- will not
have the same access to PEG channels as Defendants’ “high-end”
customers.
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5. The easement granted to Defendants does not give them control over
PEG channels that they don’t otherwise possess.
Defendants responded by arguing state law preempts any federal law Plaintiffs
rely upon. Defendants also contend that local governments have no authority to dictate
cable technology and channel placement, and that Plaintiffs interfere with their ability to
be competitive.
This Court must determine whether Plaintiffs meet their burden for entitlement to
equitable relief. When deciding motions for temporary restraining orders or for
preliminary injunctions, a district court must consider: (1) the plaintiffs’ likelihood of
success on the merits; (2) whether the plaintiffs could suffer irreparable harm without
the injunction; (3) whether granting the injunction will cause substantial harm to others;
and (4) the impact of the injunction on the public interest. Summit County Democratic
Cent. & Executive Co., v. Blackwell, 388 F.3d 547, 550-51 (6th Cir. 2004); see also
Connection Distributing Co. v. Reno, 154 F.3d 281, 288 (6th Cir. 1998), cert den., 526
U.S. 1087 (1999). No single factor is dispositive. The court must balance each factor to
determine whether they weigh in favor of an injunction. Blackwell, 388 F.3d at 550-51.
For the following reasons, the Court finds that the majority of the factors weigh in
favor of Plaintiffs. The Court GRANTS Plaintiffs’ Motion for a Temporary Restraining
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IV. ANALYSIS
requirements on cable operators, with respect to channel capacity for PEGs. Section
531 states:
****
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Defendants argue that Plaintiffs improperly apply the Cable Act to their planned
actions. Pointing to Michigan’s Uniform Video Services Local Franchise Act of 2006
(“Franchise Act”) M.C.L. § 484.3301 et seq., which became effective January 1, 2007,
Franchise Agreement”). Defendants say the only PEG requirement contained within the
Michigan Franchise Agreement is that “new video service providers provide the same
number of PEG channels as provided by the incumbent” before the effective date of the
Plaintiffs are correct. Further, M.C.L. § 484.3302(3)(h) requires that “[t]he uniform
video service local franchise agreement . . . include . . . a requirement that the provider
agrees to comply with all valid and enforceable federal and state statutes and
regulations.” And, contrary to Defendants’ position, the requirements of § 531 and other
federal statutory requirements, are not, “in addition to . . . the provisions of [the] uniform
video service local franchise agreement . . . .” By its terms, the Michigan Franchise
Agreement requires compliance “with all valid and enforceable federal and state
statutes and regulations,” and this compliance is not “additional” to anything in the
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The Supreme Court described “the requirement to reserve capacity for [PEG]
channels [as] similar to the reservation of a public easement, or a dedication of land for
Area Educ. Telcoms. Consortium v. FCC, 518 U.S. 727, 760-61 (1996). Even if PEG
channels enjoy a public right of way, the Court is not convinced that their “public right of
way,” without more, prohibits their relocation or transition from analog to digital format.
3. Federal Law Does Not Prohibit Defendants From Offering Digital And
explicitly requires that a cable operator provide PEGs on a basic service tier containing:
47 U.S.C. §543(b)(7).
Plaintiffs seem to rely on this and legislative history to support their argument that
Defendants cannot differentiate between formats they use for PEGs and broadcast
channels.
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channels. See H.R. Rep. No. 98-934, 1984 U.S.C.C.A.N. at 4667 (1984); H.R. Rep.
No. 102-628 (1992); see also 8 FCC Rcd 5631, 5738 (FCC 1993) (“The House
provision was enacted into law, so the House Report is relevant in determining
congressional intent.”). Pointedly, one portion of the House Report states “PEG . . .
[T]he Committee believes that it is appropriate that such channels be available to all
cable subscribers on the basic service tier and at the lowest reasonable rate.” H.R.
Rep. No. 102-628 at 85 (1992) (emphasis added). In addition, Plaintiffs note the FCC
held that the Cable Act “require[s] a cable operator . . . to carry PEG channels on the
basic tier unless the franchising authority explicitly permits carriage on another tier.” In
the Matter of the Implementation of the Section of the Cable Television Consumer
Protection and Competition Act of 1992 Rate Regulation, 8 F.C.C.R. 5631, 5737-38.
including both digital and analog channels on the basic service tier, or from providing
PEGs in one format and broadcast channels in a different format. In fact, Plaintiffs
concede this, and it is unlikely they will prevail on the merits of this claim.
tier. After January 15, 2008, basic service tier customers who want to see PEGs must
invest in additional equipment (beyond the one free converter box) because signals will
only be digital and no longer available in analog. Defendants will impose additional
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equipment costs on the basic service tier, and burden those basic service tier
customers who want to view the PEG channels. Customers similarly situated – whose
subscription says they are receiving the same service --will have different equipment
Federal law does not require that the basic service tier be the lowest priced tier.
However, the total cost for the basic service tier (including service and equipment), must
be reasonable, taking into account the cost of equipment for the basic service tier. 47
burden some customers and not others, who subscribe to the same basic service tier,
with the requirement to purchase additional equipment to access services they are
similarly charged for. Defendants plan to charge a uniform rate for a basic service tier
they are receiving the same service -- will have different equipment costs imposed on
them, and those who choose not to incur additional cost will pay for channels they are
not able to access. These costs may be unreasonable, and may support a likelihood of
not appear that this subsection Plaintiffs cite governs anything but “refunds,” a concern
not present here. See 47 C.F.R. 76.309(c)(3)(i)(B) (“(i) Refunds – Refund checks will be
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Despite this shortcoming, the parties referenced additional bases for notice
fundamental. Defendants gave notice within the required 30 days, but their notice was
inaccurate. Contrary to the notice provided by Defendants, not all current limited basic
service tier customers will be able to find the PEG channels in the 900 channel range in
customers who have more advanced television sets and intend to use their equipment’s
QAM tuners to access PEGs, may not be able to locate the PEGs in the 900 channel
range. Customers with third-party equipment may face the same difficulties.
Defendants say they could not accurately state where these channels will show
up after the transition for those customers using third-party equipment. At the hearing it
became clear that Defendants could have easily indicated where the great majority of
Further, Plaintiffs state that the notices failed to inform customers of the free
It is likely Plaintiff will prevail on the merits of this claim. Defendants’ customers
in Dearborn and Meridian did not receive accurate and sufficient notice.
operators shall not scramble or otherwise encrypt signals carried on the basic service
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tier.” 47 C.F.R. § 76.630(a). Plaintiffs say they have reason to doubt that Defendants
are in compliance with this requirement. A recent test conducted by Plaintiffs did not
confirm that advanced televisions with QAM capability could receive the PEG channels.
In any event, Plaintiffs do not rely heavily upon the explicit requirements in 47 C.F.R. §
76.630(a). Instead, they read it in light of the FCC’s commentary, which states that 47
subscribers are able to receive basic tier signals ‘in the clear’ and that basic-only
subscribers will not need set-top devices at all.” In the Matter of Implementation of
Section 17 of the cable Television Consumer Protection Act of 1992, First Report and
Order, 9 F.C.C.R. 1981, 1991 (1994). Relying on this interpretation, Plaintiffs argue that
the basic service tier must be offered in a manner that minimizes the need for
unnecessary equipment.
cable operators offering channels whose reception requires a convertor box . . . to the
extent technically and economically feasible, to offer subscribers the option of having all
other channels delivered directly . . . without passing through the convertor box.” 47
U.S.C. § 544a (c)(2)(B)(ii). The statement is only a regulatory goal. The provision
create regulations. In addition, 9 F.C.C.R. 1981, 1991 do no more than state what 47
C.F.R.§ 76.630 requires, which is that basic tier signals be provided in the clear. The
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Even if the Court were to consider the argument, it does not have a substantial
prohibits the unilateral change of PEG channel locations, Plaintiff Meridian’s agreement
appears to significantly differ. That agreement states that Defendants will be permitted
to change the location of PEG stations after paying a small penalty. See Meridian
unilaterally change the location of PEG channels. Plaintiff Meridian cannot succeed on
Plaintiff Dearborn represents that its franchise agreement explicitly prohibits the
actions. Defendants did not rebut this argument, and it is likely Dearborn will prevail on
the merits.
B. Municipal Plaintiffs Will Suffer Irreparable Harm If the Status Quo Is Not
Maintained
Municipal Plaintiffs and Gillette argue denial of their motion will result in
irreparable harm.
The Court finds that any injury Gillette will suffer is not irreparable. She could
request and receive Defendants’ converter free of charge for one year. If she has more
than one television she can be compensated in money damages for any rental fees she
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Municipal Plaintiffs have more at stake. They argue that denial of this motion will
result in their inability to communicate with the public through governmental PEG
channels. According to the Municipal Plaintiffs, during the time the PEGs are not
available in analog, Plaintiffs would lose a large portion of their audience because these
viewers would be unable to: (1) receive the government access channel; (2) afford to
pay the higher equipment cost; and (3) locate the PEG channel after they are moved.
In addition, the Municipal Plaintiffs allege they may even lose current digital cable
subscribers because the channels will be more difficult to find by channel surfing or
through the use of the cable program guide. Plaintiffs also argue their educational
programming will suffer irreparable harm through lost viewership, and the disruption of
Defendants argue the harm will be minimal because they will provide a free
converter for a year to each customer. Although this free converter box addresses
harm to Gillette, it leaves unanswered Municipal Plaintiffs’ argument that they will be
The Court finds that the effect of the additional inconvenience of requesting a
new box, the relocation of the channels, and lost viewers cannot be adequately
Municipal Plaintiffs on November 15, 2007 of their plan. Plaintiffs assert they attempted
to get information and mediate the controversy before filing these motions. Indeed, a
member of Congress is involved in the dispute and, has scheduled a legislative hearing.
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Because of these efforts the two month delay does not undercut the Municipal Plaintiffs’
C. Defendants and Others will not be Significantly Harmed and the Public Interest
Plaintiffs argue that Defendants will not be significantly harmed if their motion is
granted. They say there is no reason why Defendants must transfer the PEG channels
on January 15, 2008. Conversely, Defendants maintain they will face financial hardship
if the Court grants Plaintiffs’ motion because it will reduce their ability to introduce new
products and remain competitive. According to Defendants, they must “meet [their]
customers’ needs” by digitizing channels to free up space and provide new channels
and services. Witness David Bruhl testified that a grant of Plaintiffs’ motion would
hinder the ability to add four high-definition stations on January 15, 2008 as planned.
Defendants also say the public has an interest in the transition from analog to digital.
To the extent the Court accepts Defendants’ argument that it must digitize
channels, it does not agree that the transition must occur on January 15, 2008. Indeed,
Defendants indicated at the hearing they could go forward on January 15, 2008 with the
addition of these new channels in most areas. Further, while the Court agrees there are
some general benefits with digitizing channels, it finds the public interest is better
served by the temporary preservation of the PEG channels in their analog format so the
public may maintain access to vital information. Therefore, although consumers looking
any harm they may suffer does not outweigh the harm to Plaintiffs and to the public.
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V. CONCLUSION
Both sides in this dispute have substantive arguments on the merits which weigh
in their favor. Until the merits of this case can be fully sorted, the Court finds the
balance of the equities -- substantial harm to others, the public interest and harm to the
municipal Plaintiffs -- weigh in favor of the relief sought by Plaintiffs. The status quo will
be maintained.
GRANTED.
VI. ORDER
Court, from moving channels for public, educational and governmental use (“the PEG
channels”) from their current location or changing the format in which they are delivered
since Defendants acknowledge that any damage claims they have against the Municipal
Plaintiffs for their regulation of cable service are limited by 47 U.S.C. §555a(a) to
injunctive or declaratory relief. See also Time Warner Entertainment Co., L.P. v F.C.C.,
93 F.3d 957, 980 (D.C. Cir. 1996)(noting franchising authorities’ immunity from
monetary damages); Jones Intercable of San Diego, Inc. v City of Chula Vista, 80 F.3d
IT IS ORDERED.
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s/Linda Vertriest
Deputy Clerk
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